In Sri Lanka, there are many accounting and auditing firms. Accounting and auditing firms have experienced professionals who perform various tasks i.e. related to accounts and finance. This type of firms in Sri Lanka are considered as a vital statutory structure for all kind of business. All the auditors and accountants are highly prioritized by the Sri Lankan Government as they initiate steps and regulations to check the fairness and solidity of business financial statements.
This auditing process is usually processed for foreign investors and business owners who comes in from a different nation to set off their own business in Sri Lanka.
Core Audit Services Originated by The Audit Firms in Sri Lanka
There are many services that is initiated by the audit firms. Some of them are pointed out below—
- Company Financial Statement Audits
- IT controls
- Company Projects
- Compliance Audit (Service Tax Audit, TDS Audit etc.)
- Infrastructural controls and security Audit
- Due Diligence Audit
- Company Management Audit
- Efficiency Audit
- Organizational structure Audit i.e. (Hierarchy Audit)
- Corporate governance Audit
- Internal Audit
Core Accounting Services Initiated by Accounting Firms in Sri Lanka
- Entry and review of Accounting Journal.
- Review of Employee Expenses.
- Filling, collecting and payment issued for Sales & Purchases Invoice.
- Cash review.
- General ledger and periodical trial balance preparation.
- Preparation of Monthly financial statement.
All accounting and audit firms consist of highly qualified auditors and Chartered accounts. They have all the necessary skills to perform audits and accounting related tasks. The accountants can generate a financial statement maintaining the standard of GAAP and IFRS.
Accounting & Auditing Standard in Sri Lanka
2. (1) The Institute of Chartered Accountants of Sri Lanka can adopt changes that necessary for the purpose of maintaining a uniform and high standard in the preparation and presentation of accounts of business enterprises.
The accounting rules of Sri Lanka adopted pursuant to sub article (1) will be published in the bulletin and will take effect from the date of publication or a later date that can be specified
3. (1) The Institute shall from time to time adopt the appropriate auditing standards, that may be necessary for the management of the audit of business accounts.
(2) The Sri Lanka Audit Standards adopted the subsection 1 (1) shall be published in the Bulletin and shall take effect from the date of publication or at a later date specified therein.
As per the ACT Sri Lanka Accounting Standards and Sri Lanka Auditing Standards adopted by the Institute that is further published in the Gazette are applicable to those business organizations and industries as specified in the schedule to the Act itself.
These Enterprises are as shown below–
|1||Companies licensed under the Banking Act, No. 30 of 1988.|
|2||Companies authorized under the Control of Insurance Act, No. 25 of 1962, to carry on insurance business.|
|3||Companies carrying on leasing business.|
|5||Companies registered under the Finance Companies Act, No. 78 of 1988.|
|6||Companies licensed under the Securities and Exchange Commission Act, No. 36 of 1987, to operate unit trust.|
|7||Fund Management Companies.|
|8||Companies licensed under the Securities and Exchange Commission Act, No.36 of 1987, to carry on business as stockbrokers or stock dealers.|
|9||Companies licensed under the Securities and Exchange Commission Act, No. 36 of 1987, to operate a Stock Exchange.|
|10||Companies listed in a stock Exchange licensed under the Securities and Exchange Commission Act, No.36 of 1987.|
|1) Which have a turnover in excess of Rupees of 500 |
2) Which at the end of the previous financial year, had shareholders equity in excess of Rupees 100 Million.
3) Which at the end of the previous financial year, had gross assets in excess of Rupees 300 Million.
4) Which at the end of the previous year had liabilities to banks and other financial institutions in excess of Rupees 100 Million.
5) Which have a staff in excess of 1000 employees?
|12||Public Corporations engaged in the sale of goods or the provision of services.|
|13||A group of companies.|
Duties and Responsibilities
Duties and Responsibilities Imposed by the Act of Sri Lanka Accounting Standards and Sri Lanka Auditing Standards:
Duties of Specified Business Enterprises
|1||Prepare its financial statements in compliance with Sri Lanka Accounting Standards, and take all necessary measures to ensure that the financial statements are audited in accordance with Sri Lanka Auditing Standards with the motive of presenting a true and fair look of the economic performance and financial position of similar an enterprise.|
|2||To have the financial statements audited by members of the Institute of Chartered Accountants of Sri Lanka holding a certificate to practice, issued by the Institute.|
|3||Submit a copy of the annual financial statements of the enterprise to the Sri Lanka Accounting and Auditing Standards Monitoring Board, to enable the Board to determine whether the financial statements have been ready in willingness with Sri Lanka Accounting Standards.|
|4||To furnish to the Board or to any person authorized by the Board any information pertaining to its financial statements as may be required by the Board or any individual authorized by the Board within such time, as may be individualized in a notice issued by the Board or any person authorized by it.|
Duties of the corporate Members:
Administrators, Managers, Secretaries and different Official figures. It is the duty of all administrators, managers, secretaries and different similar officers of an organization or a Public Corporation to exercise all such diligence to stop the commission of an offence beneath the Act as he/she need to exercise having reference to the character of his/her functions and also the circumstances of the case.
Duties of the Auditors
The monetary statements of each specified commercial enterprise shall be audited by a member of the Institute of hired Accountants of Sri Lanka holding a certificate to follow issued by the institute.
The Act needs the auditors to certify in their audit report that the audit has been conducted in accordance with Sri Lanka Auditing Standards which the monetary statements are ready and submitted in accordance with Sri Lanka Accounting Standards. Well, now you need to know about how to start an export business in Sri Lanka as a foreigner.